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Observation Update

Today was a nice bounce back day from Friday's close for the indexes and our stocks.  It provided the breathing room that as a trader allows you let the system work.  Hard moves to the downside over a few days are difficult to judge and can leave you second guessing.  The markets could very well be headed for a correction, but if the correction takes a more standard route, then the stocks will be able to work through the down turns and many will likely keep their trends in tact. 

Right now as we look over the portfolio, it's obvious that it is almost tiered in three sections.

  1. In the top tier we have LITE, NPTN, UBNT, OCLR really pushing their trends higher.
  2. In the second tier we have FN, KRA, HDSN which have the potential to move up the ladder and join the upper group.
  3. In the third tier we have MTCH, DTSI, TSEM, TTMI, CTRL, RSYS which haven't been able to really push their trends past our entry points.  Some of these are still consolidating initial breakouts from a month or so ago. 

It's very common for your portfolio to begin to tier itself into groups.  Some will zoom higher while others will fall on their face or not appreciate much.  Generally if not much has happened over a month or two, and there are new candidates presenting themselves, then it's best to sell the non-performers. 

Below are the charts for all the current positions.  Notice that it is generally that third tier which stays near the trend lines.  When the market corrects this is usually the group that is first to go from our portfolio.  Most want to sell their big winners first and hold the weaker ones.  It's best to do the opposite.

Below are the charts.


As I've mentioned in past updates, SLV is being traded based on the weekly trend.  Currently 16.99 remains our trailing stop.  If for some reason, other stock trades become more attractive then it is possible that SLV will be removed for better opportunities.

The watchlist and screens have all been updated and can be downloaded to your preferred charting software.  Have a great night and we'll see what tomorrow brings.

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